YONDENKO CORPORATION Q4 FY2025 earnings call

• Overall 2024 Financial Performance

• All-time record high order backlog, sales, and all profit metrics (the highest recorded since Yondenko began reporting consolidated results in 1999), driven by large project wins, steady project progress, stable procurement of materials and equipment, and strict cost management
• Consolidated order backlog: 99.5 billion yen, up 1.7 billion yen year-over-year; consolidated operating profit margin increased 0.6pp to 7.6%, gross margin remained at a strong 17.4%, ROE reached 8.2%
• Yondenko standalone sales hit an all-time high of 94.1 billion yen, up 16.9 billion yen year-over-year, boosted by strong progress on delayed large projects from the prior year. Nearly all project types and all regions recorded sales growth; carried-forward project volume fell 6.4 billion yen to 47.7 billion yen due to strong progress, but still remains at a high level

• Balance Sheet and Cash Flow

• Total assets fell 3.5 billion yen to 99.6 billion yen, total liabilities fell 6.6 billion yen, and net assets increased 3.0 billion yen to 64.8 billion yen, after the company eliminated bill/factoring deferred payment and switched all supplier payments to cash transfer starting in 2024. Equity ratio rose 5.3pp to 65.1%
• 2024 consolidated operating cash flow recorded a 0.5 billion yen outflow, a one-time effect from the payment term change (simultaneous settlement of outstanding bills and increased cash transfers through August); investing cash flow recorded a 1.1 billion yen outflow driven by purchases of tangible fixed assets; financing cash flow recorded a 4.2 billion yen outflow driven by long-term debt repayment and dividend payments. Ending cash and cash equivalents fell 5.9 billion yen to 16.3 billion yen

• Capital Return and Shareholder Returns

• Progressed profit expansion to boost ROE, adjusted capital structure, and expanded shareholder returns. ROE rose to 8.2% (up from prior year) even as net assets accumulated; PBR stood at 0.94x at fiscal year end
• 2024 full year dividend is planned at 65 yen per share (post-stock split: 30 yen interim, 35 yen year-end), an increase from prior guidance aligned with the upward 2024 earnings revision. 2025 full year dividend is planned to remain 65 yen per share (32 yen interim, 33 yen year-end)

• Mid-Term Management Guideline Progress

• All core numerical targets (100.0 billion yen sales, 6.0 billion yen operating profit, 8% ROE) were achieved one year ahead of schedule. Distribution line construction and electrical/instrumentation construction significantly exceeded targets; only the Kansai regional segment missed its target
• The company will continue to base its operations on Shikoku, and work to strengthen its earnings base in the Tokyo metropolitan and Kansai areas, where construction demand is relatively strong, targeting performance above the original mid-term targets

• Human Resources Investment

• Yondenko identifies talent as its most important capital, and has planned hiring to expand its technical workforce. As of April 2025, standalone headcount is 2,264, consolidated headcount is 2,773, almost exactly meeting hiring plans
• Recent initiatives include a company-wide 15 thousand yen base pay increase, introduction of a scholarship proxy repayment program, and revision of personnel systems to strengthen construction capacity in the Tokyo metropolitan and Kansai areas. The company will relocate and rebuild its employee training center to improve talent recruitment and training for sustainable growth.

Against the 2025 Mid-Term Management Guideline 2025 targets, the 2024 full year consolidated segment performance by product is as follows: 1. Distribution line construction: 35.3 billion yen, contributing ~33.4% of total consolidated sales; 2. Power transmission and civil engineering construction: 5.0 billion yen, contributing ~4.7% of total consolidated sales; 3. Electrical and instrumentation construction: 36.4 billion yen, contributing ~34.4% of total consolidated sales; 4. Air conditioning and pipe construction: 15.7 billion yen, contributing ~14.8% of total consolidated sales; 5. Information and communications construction: 8.2 billion yen, contributing ~7.8% of total consolidated sales. By region: Shikoku regional branch area: 80.6 billion yen, Tokyo metropolitan area: 15.4 billion yen, Kansai area: 9.7 billion yen. Consolidated overall sales for 2024 was 105.8 billion yen, up 13.7 billion yen year-over-year. Only power transmission/civil engineering and group companies recorded year-over-year sales declines; all other product segments recorded year-over-year sales growth.

• 2025 full year consolidated guidance forecasts lower revenue and lower profit compared to 2024 results, with projected sales of 100.0 billion yen, operating profit of 7.0 billion yen, ordinary profit of 7.5 billion yen, and net profit attributable to parent company shareholders of 5.0 billion yen • 2025 standalone guidance forecasts sales of 84.0 billion yen, operating profit of 5.0 billion yen, ordinary profit of 5.7 billion yen, and net profit of 4.0 billion yen • Management notes that carried-forward project volume remains at a high level, and these projects will be reflected in future earnings as they progress • Annual dividend per share is maintained at the same 65 yen level as 2024.

• Rising materials and equipment prices, and ongoing industry-wide labor shortages, which create challenges for order pricing decisions, construction cost control, and project progress that require active management • PBR has remained below 1.0x (standing at 0.94x at 2024 fiscal year end) despite improvements in profitability and ROE, influenced by broader market conditions

No substantive Q&A content was included in the provided transcript.